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Saturday, September 22, 2018

U.S. PRESIDENT AUTHORISES INCREASE IN STRATEGIC PETROLEUM RESERVE

Citing the need to “strengthen the long-term energy security of the United States, President Bush last week ordered the topping off of the US strategic petroleum reserve to its maximum capacity of 700 million barrels. This represents an increase of approximately 155 million barrels over present levels. Since its establishment in 1975, the Reserve has never been maintained at maximum levels. To achieve capacity levels, the U.S. Energy Department will likely take royalty payments in oil, rather than cash, from U.S. domestic producers who lease federal lands for exploration and production. These in kind royalty payments will supplement an existing obligation to replace amounts released into commerce from the Reserve last year. It is unlikely that Congress will be asked by the Administration to appropriate funds for purchases of oil on the open market.